Pet insurance is one of the fastest-growing types of insurance in America. Both the policy types and the companies that offer them have been expanding in recent years, enabling more pet owners to get comprehensive, cost-effective coverage.
Not only does pet insurance help you cover the cost of increasingly expensive medical treatment for your pet, but it can also help you avoid the difficult choice of forgoing life-saving treatment for your pet due to high cost. What’s more, flexible policy options make it easier to get the coverage you need at a premium you can afford.
What is Pet Insurance?
Pet insurance works much the same way as health insurance for people does. Generally speaking, it will cover most of the cost of most surgeries and treatments. But it will also require certain cost-sharing provisions, much like the human equivalent.
You should be aware of the following terms:
- Deductible – this is the amount you must pay out-of-pocket for eligible medical costs before coverage begins. It’s typically a flat annual amount.
- Co-insurance – this is the percentage of eligible medical costs that will be covered by the insurance company. It’s commonly equal to 70%, 80%, 90%, or even 100% of eligible medical costs.
- Annual limit – this is the total dollar amount the insurance company will pay each year. It can be anywhere from as little as $5,000, to as much as $100,000.
- Wellness coverage – these are routine veterinary visits, and they are typically excluded from health insurance coverage. But some plans do provide wellness coverage as a policy add-on with an additional premium.
- Covered provider – pet insurance companies will generally cover treatment provided by any licensed veterinarian or licensed pet care facility in a state where they offer coverage.
- Comprehensive coverage – these policies include coverage for both accident and illness. But you can also choose an accident only policy, which will be less expensive.
How Does Pet Insurance Work?
Historically, pet insurance companies provided reimbursement type coverage. That means you would first pay the veterinarian, then apply for direct reimbursement from the company. However, an increasing number of companies are now making direct payments to licensed veterinarians if the claim is filed immediately and the vet is willing to wait for direct reimbursement.
The cost of the coverage will depend on the deductible, coinsurance, and annual policy limits you choose. For example, a policy with a $250 deductible, 70%, coinsurance, and a $25,000 annual limit will have a lower premium than one with a $100 deductible, 90%, coinsurance, and $40,000 annual limit.
As we’ll explain below, the premium will also be determined by a number of factors specific to your pet and geographic location.
Once you have a policy in place, benefits will be payable to any listed treatments or procedures provided by any licensed veterinarian or pet care facility in your state of residence. However, you should be aware that while some companies provide coverage in all 50 states, there are some that don’t operate in all states.
In most cases, you’ll need to submit a claim when services are provided by the veterinarian. There’s typically a limit on-time filing, which may be anywhere from 60 days to 90 days after treatment is provided. If you fail to file the claim within this timeframe, the claim will likely be rejected.
What Does Pet Insurance Cover?
Much like any other type of insurance policy, pet insurance will cover any treatment or procedure specifically listed in the policy.
Typical treatments and procedures covered include:
- Common illnesses, like vomiting, diarrhea and ear infections.
- Serious illnesses, including cancer and heart disease.
- Accidents and injuries, resulting from collisions with cars and other events.
- Hereditary conditions.
- Lab work, including blood and urine tests.
- Surgical procedures and hospitalization.
- Prescriptions, if specifically listed in the policy.
You should also be aware that pet insurance coverage is limited to dogs and cats, and is not available for less common pets, like birds, rabbits, reptiles, snakes, and other pets. Also, policies cover only the pets name in the plan. If you have more than one pet, you’ll need to include each in the policy.
What Pet Insurance Covers Pre-existing Conditions?
This is a highly relevant question because most pet insurance companies don’t provide coverage for pre-existing conditions. A pre-existing condition is any health condition that is known to exist at the time an application for coverage is made.
However, there are a very small number of companies that will cover pre-existing conditions. Even those have very specific definitions for the types of pre-existing conditions that will be included.
For example, Pumpkin will cover conditions that are determined to be curable (as in, not terminal), and your pet has been symptom-free for at least 180 days. If they occur after that timeframe, the company will provide coverage. (See our more comprehensive description of coverage by Pumpkin below.)
What Does Nationwide Pet Insurance Cover?
Pet Insurance by Nationwide is a good example because it’s one of the few major insurance companies to provide pet insurance coverage. They provide plans for both dogs and cats.
- Accidents and injuries – including poisonings, puncture wounds, sprains, and ACL ruptures.
- Chronic illnesses – including allergies, arthritis and skin conditions.
- Procedures – including surgeries, endoscopies and chemotherapy.
- Common illnesses – including ear infections, FLUTD (for cats), vomiting and diarrhea.
- Hereditary conditions – including hip dysplasia, hyperthyroidism, diabetes, kidney disease, eye disorders, and blood disorders.
- Holistic and alternative therapies – like acupuncture, chiropractic, and laser therapy.
- Serious illnesses – including cancer, heart disease and diabetes.
- Tests and diagnostics – such as x-rays, MRIs, CT scans, ultrasounds, and blood tests.
- Wellness – including vaccinations, and flea and heartworm preventatives.
How Much is Pet Insurance and What Does it Cover?
According to the North American Pet Health Insurance Association (NAPHIA), State of the Industry 2021, average premiums for dogs and cats for comprehensive (accident and illness) coverage are as follows:
- Dogs: $585.40 per year, or $48.78 per month
- Cats: $349.93 per year, or $29.16 per month
It’s important to understand that these are just national averages. The premium you’ll pay for coverage for your own pet will depend on the following factors:
- Pet breed – some are more costly than others due to illnesses common to the breed.
- Age of the pet – similar to human health insurance plans, older pets are more expensive to insure.
- Geographic location – healthcare costs for pets are higher in some states and cities than in others. Premiums are adjusted accordingly.
- Amount of coverage – the higher the coverage limits, the higher the premiums will be.
- Reimbursement percentage – a policy that provides 90% reimbursement will have a higher premium than one with 70% reimbursement.
- Deductible amount – a higher deductible means a lower premium, while a lower deductible results in a higher premium.
- Any pre-existing conditions your pet has – even though the company generally won’t cover treatment for pre-existing conditions, the premiums are likely to be higher because of the possibility the pre-existing condition will cause other health issues.
Because of all the factors above, the best strategy is to get quotes from three or four different providers before settling on the one that will be best for you.
What Companies Offer Pet Insurance?
Healthy Paws is one of the top low-cost providers in the pet insurance industry. One of the advantages with this provider is that you can manage the policy entirely from your mobile device – the company eliminated paper claim forms. Over 500,000 pets are enrolled in their program.
They provide coverage for both accidents and illnesses, including cancer and even genetic conditions. Coverage even extends to alternative care. Reimbursements are limited to 70% or 80%, with deductibles of either $250 or $500.
Coverage is available in all 50 states, and there are no per accident, annual or lifetime benefit limits. But like most other pet insurance companies, Healthy Paws does not cover pre-existing conditions or wellness visits.
Pumpkin is one of the newest pet insurance providers, having begun only in 2020. But they have some real advantages, including up to 90% reimbursement, as well as a preventative care package. And like some of the other providers on this list, Pumpkin operates 100% digitally. That means there is no paperwork to fill out.
Pumpkin also provides dental insurance, but what may be even more important is that they do have coverage for pre-existing conditions. They’ll cover curable conditions if your pet has been symptom-free for at least180 days, even if they occur in the future. (But there is an exception for knee and hind leg ligament conditions). In addition, they cover prescription medications, hereditary conditions, behavioral therapy, and even prescription food for eligible conditions.
One other big advantage they offer is that your premium won’t automatically increase after you file a claim. And while some companies won’t accept pets beyond a certain age, Pumpkin has no age limit.
Deductibles are available in amounts of $100, $250, and $500. But there is also a 10% discount for each additional pet you enroll in the program.
One major limitation to be aware of: Pumpkin limits maximum annual coverage to no more than $10,000 for dogs (with an option for up to $20,000), and $7,000 for cats (with an option for up to $15,000).
Lemonade provides an advantage over the other insurance companies in that they offer homeowners and renters insurance policies, as well as term life insurance. That’ll give you the ability to hold multiple policy types with the same company and get a 10% discount if the company provides both your home and pet insurance. Pet insurance policies start at $10 per month. Coverage is currently available in 34 states, with more being added all the time.
You can choose from several options for the annual coverage limit, which can be anywhere from a low of $5,000 to as much as $100,000. You can also choose 70%, 80%, or 90% reimbursement. Several deductible options are offered, with $250 being the most common.
Lemonade also offers a preventative wellness plan, which is an option you can use to cover wellness visits and proactive treatments, like vaccines, flea and tick medication, heartworm prevention, and dental cleanings. In fact, it will cover up to three vaccines per year.
Embrace is one of the better-established pet insurance companies, having been launched in 2003. They have one of the most comprehensive coverage packages in the industry and offer a higher degree of coverage flexibility than most competitors. They’re one of the few pet insurance companies that will cover wellness visits.
For example, services they cover that are not typically part of pet insurance policies include prescription drugs, rehabilitation, alternative therapies, and even behavioral therapies. But they also cover accidents and illnesses, including chronic conditions, cancer, specialist care, mobility devices, and even prosthetics.
For genetic conditions, they cover ailments like dysplasia, breathing difficulties, allergies, and other hereditary conditions.
Reimbursement limits are 70%, 80%, and 90%, and deductibles range between $100 and $1,000 per year. But be aware that this company also has a relatively low annual benefit reimbursement limit. That will range between $5,000 to a maximum of $30,000, though they do have an unlimited option.
Unfortunately, it doesn't – at least not in most cases. Pet health insurance is primarily for treatment for accidents and illnesses, though most will also cover chronic conditions that develop after the policy is in force.
However, the benefit of the absence of wellness coverage is lower premiums. If pet insurance companies paid for routine visits, the premiums would be much higher than they are.
The first is having the ability to have a major expense in connection with treatment for accidents and illnesses largely paid by the insurance company.
The second is that it will provide you with expanded treatment options if expensive medical services are needed. That will give you the ability to choose treatment options that might not be available if you had to pay out of your own resources.
A good example is when a pet sustains a major injury. If the cost of treatment is say, $3,000, and you don't have the funds, you may be forced to put your pet down. But if you have pet insurance, you'll have the option to pursue more advanced treatments.